Thalfang / Maria Laach, July 4, 2018
The Hochwald Group has utilized the year 2017 to start implementing the 2020 strategy and to move it forward. In an environment of recovering markets, the revenue from the first building blocks of the strategy did consume a lot of energy, but the initial successes were already seen at the beginning of 2018 with an above average price for milk. The cooperative dairy achieved a total of 1.53 billion Euro in sales revenue, the export quota lies at 45.5 % and the equity capital ratio lies at 31.5%. The company estimates a milk price above the national average for 2018. The board of directors and the supervisory board have decided to discontinue the scale surcharge. Fiscal Year 2017
Hochwald closed the 2017 fiscal year with a revenue increase of more than 12%. In this year, the market was extremely volatile, fat and protein markets developed very differently, and enormous price changes took place in both markets. At the same time, the initial effects of implementation of the strategy adopted last year had an impact on the results of the Hochwald Group and had a particularly adverse impact on business development. Strategic topics such as finding a new property for a new plant, the development of the fixed price model and the theme of sustainability were in focus. In 2017, milk suppliers for the cooperative were paid a milk price of 33.9 ct/kg (compared to + 7.8 ct/kg in the past year).
A number of investments were completed during this fiscal year, at the locations Hungen, Kaiserslautern, Thalfang and Bolsward, in order to take over production volumes of the plant in Weiding. In addition, Kaiserslautern and Erftstadt investments for the processing of GMO free milk were required. The investments of this fiscal year were around 38 M €. The company's equity capital increased in 2017 to 181.5 M €, the equity capital quota increased from 29.5 % to 31.5 %.
The milk market is expected to stay volatile in 2018. Hochwald will continue the implementation of the Hochwald Strategy 2020 with the goal of supplying owners with an above average milk price. Detlef Latka, Chief Executive Officer: “In terms of the first five months of this year, Hochwald's milk price is above the national average. Both the development of the market, as well as the initial results from Hochwald 2020, are part of the reason behind this.”
Hochwald 2020 is based on strengthening the cooperative model. The goals for corporate social responsibility, technology optimization, focused internationalization, portfolio development, as well as organization and governance are an integral part of the realignment of the Hochwald Group, which demands a lot of change. Members have proven their appetite for change. The company will add a fixed price model by the end of 2019. This ensures milk price protection through a stock market model. In addition, the decoupling of contractual duties and termination was adopted. Detlef Latka: "Hochwald is a modern cooperative that is developing with modern tools and innovative ideas. The fixed price model and the shortened contractual duties are two examples of this development”, explains the Chief Executive Officer. "This is also the reason we are working on our own sustainability model. Milk will also be valued in the future by consumers as a high quality nutritious food item. Most likely in more variations than today, but always from the standpoint of quality.”
Quality is also the focus of Greenfield, a modern and highly efficient dairy plant. This plant is being built in Mechernich in North Rhine-Westphalia. Thorsten Oberschmidt, Hochwald’s Chief Operating Officer, affirms, “We are planning to begin using the plant around two years after construction has begun.” Ground breaking is planned for spring 2019.
Facts and figures
of which from exports
Property, plant and equipment investments
Performance price for 4.0 % fat and 3.4 % protein, including additional payments and value added tax
Hochwald Foods GmbH
Tel.: +49 6504 125 129